Life insurance uli ps final

Life Insurance - ULIPs

Insurance is pooling of risks. In a contract of insurance, the insurer undertakes, in consideration of a sum of money (premium), to make good the loss suffered by the insured against a specified risks such as fire and any other similar contingency of compensate the insured on the happening of a specified event such as accident or death. The business of insurance is related to the protection of the economic values of assets. Insurance INSURE

Life Insurance Polices Digital Commerce Annuities Policy Whole Life Policy Endowment Policy Types of Life Insurance Policies . Term Policy Term Policy and whole life insurance policies focus on risk-coverage Endowment policy and annuities insurance policies focus on investments ULIPs focus on both risk-coverage and the investments ULIP

What is ULIP ? A category of financial solutions that combine the safety of insurance protection with wealth creation opportunities U: Unit L : Linked I : Insurance P : Plan Premium for ULIP Investment as Unit Life Coverage

Why ULIP is so attractive?

Investment Option For Your Money FUND TYPE ASSET MIX POTENTIAL RISK /REWARD Maximiser Balancer Protector Equity& Related securities: Max 100% Debt, Money market & Cash: Max 25% Debt. Money market & Cash: Min 60% Equity & Related securities: Max: 40% Debt Instruments, Money market & Cash: Max 100% High Moderate Low

Associated Charges/Costs

What is NAV ?
NAV
Net Asset Value is value of assets held by the insurance co after deducting various charges and it is computed daily based on closing price of securities.
HOW IS UNIT VALUE CALCULATED?
A = Market /Fair Value of the relevant Plans Investment Plus Current Assets
Less Current Liabilities and Provisions.
B = Number of Units outstanding under the relevant Plan
NAV = A/ B
FOR EXAMPLE:
Let's assume at the close of trading yesterday that a particular mutual fund held Rs.10,500 worth of securities, Rs.2,000 of cash, and Rs.5000 of liabilities. If the fund had 1,000 shares outstanding, then yesterday's NAV would be:
NAV = (10,500+ 2,000 - 5000) / 1,000 = Rs.7.5

IRDA is the regulatory authority for insurance industry in India
The IRDA deals with discrepancies in the insurance sector.
It has been established to protect the interest of policyholders
Regulations of IRDA:
Rural/Social Sector Obligations
Insurance Advertisement
Licensing of Insurance Agents
General Insurance: Reinsurance
Life Insurance: Reinsurance
Investment Norms
Third Party Administrators
Protection of policyholders Interest
Micro-insurance
Insurance Regulatory and Development Authority (IRDA) The insurance sector has opened up for private insurance companies with the enactment of IRDA Act, 1999. A large number of companies are competing under both life and general Insurance. The FDI cap/equity in this sector is 26% and the proposals have to be cleared by Insurance Regulatory and Development Authority (IRDA.)

NEW GUIDELINES FOR ULIP BY IRDA as on 31.05.201
Lock in period has been increased from 3 years to 5 years thereby making it long term financial instrument
Premium has gone up to 10 times of first year premium compared to 5 times
Expected commission and expense have been reduced by evenly distributing it through-out lock in period
ULIP pension or annuity will offer minimum guarantee return of 4.5 %
Standardization of surrender charges

Key Players in the Insurance Industry

Best Selling ULIP PLANS

Investment Ulip Plans
ULIPs are the right insurance solutions for a strong wealth creation allied to a core insurance benefit. As is the case with mutual funds, investors in ULIPs are allotted units by the insurance company and a net asset value (NAV) is declared for the same on a daily basis.
Some of the Best Selling ULIP Investment Plans from Major Competitors are :

ICICI PRU PINNACLE SUPER

HDFC SL CREST

LIC ENDOWMENT PLUS

MAX NEW YORK FAST TRACK PLAN

Child Plans
Today there are ULIPs that offer money at key milestones of your child's
education thus ensuring that your child’s education continues unhampered
even if something unfortunate happens to you. While, the death of a parent is
an irreparable emotional loss, child education plans safeguard the child
against the financial ramifications of the death of a parent.
Some of the Best Selling ULIP Child Plans from Major Competitors are :

ICICI PRU SmartKid Premier

HDFC SL YOUNGSTAR SUPER II

MAX NEW YORK SHIKSHA PLUS II

Retirement ULIP PLANS
Pension plans from insurance companies ensure that regular, disciplined savings in
such plans can accumulate over a period of time to provide a steady income post
retirement. Usually all retirement plans have two distinctive phases
The accumulation phase when you are saving and investing during your earning years to build up a retirement corpus and
The withdrawal phase when you actually reap the benefits of your investment as your annuity payouts begin
Some of the Best Selling ULIP Investment Plans from Major Competitors are :

ICICI Pru LifeLink Pension SP

HDFC SL PENSION MAXIMUS

LIC PENSION PLUS

Conclusion

Life insurance uli ps final

by Rajan Iyer

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